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People investing in futures do this every day, and some of them are most certainly credible. Southwest Airlines, e.g., seems to be pretty good at saving a buck
by edj 16y ago
People investing in futures do this every day, and some of them are most certainly credible. Southwest Airlines, e.g., seems to be pretty good at saving a buck with aviation gas futures (though that is a step removed from crude oil).
- pw0ncakes 16y agoThere's a difference between buying futures (which may or may not pay off) and reliably predicting the price of oil. Also: Southwest buys fuel futures to hedge its exposure, which is different from speculation. People hedge because they don't know what the price will do, and want to be OK regardless of price movements.
- hugh3 16y agoPeople investing in futures do this every day, and some of them are most certainly credible. If it were possible to do significantly better than blind luck in speculation about future prices then there'd be nobody around to take the other side of the contract.
- yummyfajitas 16y agoSpeculators usually earn a premium over what they would get via blind luck. If they didn't, there would be no speculators. The reason why trades occur at all is that not everyone is a pure trader. Hedgers (e.g. Southwest) trade futures to reduce business risk rather than to make money. They tend to make a net loss on trading but earn back a greater amount of money via their core business.